Germany were exposed again and again by Mexico's counter-attacking, and if they had been more accurate with their final pass then they would not have had to endure the tense finale as the holders threw everything forward.
Germany had been shambolic in preparation towards the World Cup.
Brimming with confidence ahead of their World Cup Group F opener in Moscow's Luzhniki stadium, Osorio conceded the four-times world champions were tournament favorites but said his team was in with a chance. The last occasion of them failing to win their first game was in Mexico in 1986, when they were held to a 1-1 draw by Uruguay.
It could have been embarrassing for the defending champions, had Mexico been ruthless in front of goal but what they did not do in attack, they did in defence with resilience as if their lives depended on it.
Germany's Mats Hummels reacts to the defeat against Mexico.
"In the first half we played very badly", Loew said.
Germany's Joshua Kimmich (left) and Mexico's Hirving Lozano compete for the ball.
He doesn't share the doll's red hair, but got the name as a young player at Mexican club Pachuca when he played pranks by hiding under teammates' beds. Widely considered a slur, some argue there is no discriminatory intent.
Mexico only lost one game in qualifying and have reached at least the second round of every World Cup they have played.
Germany needs points from matches against Sweden on Saturday and South Korea on June 27 to avoid elimination.
"We were nervous and we weren't playing the game we wanted to play".
"We did not do it well", he said.